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Northwestern Corp. (NWE)
NASDAQ:NWE

Northwestern (NWE) AI Stock Analysis

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Northwestern

(NASDAQ:NWE)

Rating:68Neutral
Price Target:
$57.00
▲(8.63%Upside)
Northwestern Energy's overall stock score is driven by its solid financial performance and positive earnings outlook. However, bearish technical indicators and cash flow concerns moderate the score. The attractive valuation and strong dividend yield support long-term value, while ongoing regulatory challenges present potential risks.
Positive Factors
Financial Performance
NorthWestern Energy Group delivered strong 1Q25 results, indicating successful regulatory outcomes, infrastructure investment, and load growth opportunities.
Growth Opportunities
Growth visibility is improving with letters of intent from Altus Power and Sabey, which could lead to contracts and require new resources, enhancing potential growth.
Regulatory Environment
Recently passed legislation in Montana should meaningfully reduce any potential liabilities related to wildfire tail risks.
Negative Factors
Earnings Growth
The profile has below-average EPS and rate base growth, a noisy regulatory history coupled with an expectation of more frequent filings going forward, and wildfire tail risks relative to the size of the company.
Operational Costs
Gains were partially offset by higher operating costs, increased depreciation, milder weather, and increased interest expense.
Regulatory Challenges
The profile has a noisy regulatory history coupled with an expectation of more frequent filings going forward.

Northwestern (NWE) vs. SPDR S&P 500 ETF (SPY)

Northwestern Business Overview & Revenue Model

Company DescriptionNorthWestern Corporation, doing business as NorthWestern Energy, provides electricity and natural gas to residential, commercial, and various industrial customers. The company operates through Electric and Natural Gas segments. It generates, purchases, transmits, and distributes electricity; and produces, purchases, stores, transmits, and distributes natural gas, as well as owns municipal franchises to provide natural gas service in the communities. The company operates 6,819 miles of electric transmission and 18,177 miles of electric distribution lines with approximately 400 transmission and distribution substations; and 2,166 miles of natural gas transmission and 4,945 miles of natural gas distribution lines with approximately 138 city gate stations in Montana. It also operates 1,308 miles of electric transmission and 2,320 miles of electric distribution lines in South Dakota; and 55 miles of natural gas transmission and 2,517 miles of natural gas distribution lines in South Dakota and Nebraska. The company serves approximately 753,600 customers in Montana, South Dakota, Nebraska, and Yellowstone National Park. NorthWestern Corporation was incorporated in 1923 and is based in Sioux Falls, South Dakota.
How the Company Makes MoneyNorthWestern Energy generates revenue through the sale of electricity and natural gas to its customers. The company's key revenue streams include residential, commercial, and industrial energy sales, where customers are billed for the amount of electricity and natural gas consumed. Additionally, NorthWestern Energy may earn revenue through regulatory mechanisms that allow for cost recovery and return on investment in infrastructure projects. The company also benefits from strategic partnerships and investments in renewable energy sources that can enhance its service offerings and appeal to environmentally conscious consumers. NorthWestern Energy's earnings are influenced by factors such as regulatory decisions, energy demand fluctuations, and fuel cost variations.

Northwestern Earnings Call Summary

Earnings Call Date:Apr 29, 2025
(Q1-2025)
|
% Change Since: -10.70%|
Next Earnings Date:Aug 05, 2025
Earnings Call Sentiment Positive
The earnings call depicted a positive outlook for NorthWestern Energy, with strong financial performance in the first quarter, successful debt financing, and legislative wins. However, there are ongoing regulatory challenges that need resolution.
Q1-2025 Updates
Positive Updates
Solid First Quarter Earnings
Reported GAAP diluted EPS of $1.25 and non-GAAP diluted EPS of $1.22, showing significant improvement from the previous year.
Completion of Debt Financing for 2025
Successfully priced $500 million of long-term debt, addressing financing needs for 2025 amidst market volatility.
Regulatory and Legislative Success
Achieved partial settlement in Montana electric rate review and full settlement in gas case. The Montana legislature passed a strong wildfire bill providing significant protection to the company.
Strong Customer Growth and Favorable Weather Impact
Favorable weather and customer growth contributed to a $0.13 improvement in earnings per share.
Potential for Large Load Customer Expansion
Opportunities with data centers and other large load customers could lead to greater than 6% EPS growth.
Negative Updates
Ongoing PCCAM Headwinds
Non-recoverable Montana electric supply costs remain a headwind, with $2.7 million detriment in Q1 2025.
Pending Regulatory Approvals
Key contested issues remain in the Montana electric rate review, related to Yellowstone revenue requirement and PCCAM base.
Company Guidance
During NorthWestern Energy's First Quarter 2025 Financial Results Webinar, the company reported a GAAP diluted EPS of $1.25 and a non-GAAP diluted EPS of $1.22. They affirmed their long-term rate base and earnings per share growth rate targets of 4% to 6%. NorthWestern also completed its 2025 debt financing needs, with no planned equity financing for the current five-year capital investment. The company declared a $0.66 per share dividend payable on June 30, 2025. The Montana rate review is nearing completion, with both full natural gas and partial electric settlements reached. The quarterly results were driven by strong margin contributions, with new rates contributing $0.20 per share improvement, and favorable weather adding $0.03. NorthWestern also successfully priced $500 million in long-term debt, and their FFO to debt metric closed out the quarter above 14%. The company is confident in delivering on long-term growth commitments, maintaining a 5-year capital plan without requiring new equity, and sees opportunities with data centers and large load opportunities potentially exceeding the 6% EPS growth target.

Northwestern Financial Statement Overview

Summary
Northwestern demonstrates solid profitability with strong margins and a stable balance sheet, although cash flow management poses concerns due to negative free cash flow driven by significant capital expenditures.
Income Statement
75
Positive
Northwestern's income statement shows strong profitability with a notable gross profit margin of 96.47% TTM, supported by a solid net profit margin of 15.68% TTM. However, the revenue growth has been inconsistent, showing a slight decline of 0.57% from the previous annual period. The EBIT and EBITDA margins remain healthy at 22.98% and 39.65% TTM, respectively, indicating efficient operational management.
Balance Sheet
70
Positive
The balance sheet reflects stability with a moderate debt-to-equity ratio of 1.08, suggesting manageable leverage. The return on equity (ROE) stands at a robust 8.15% TTM, demonstrating effective use of shareholder funds. An equity ratio of 35.75% highlights a solid equity base, though there's room for improvement in reducing liabilities.
Cash Flow
65
Positive
Northwestern's cash flow statement presents challenges, with a negative free cash flow and a concerning free cash flow growth rate of -5.87%. The operating cash flow to net income ratio is favorable at 1.69 TTM, indicating strong cash-generating ability relative to profits, but the negative free cash flow to net income ratio of -0.57 highlights significant capital expenditures impacting liquidity.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue1.51B1.51B1.42B1.48B1.37B1.20B
Gross Profit1.31B1.29B781.36M985.80M946.77M892.48M
EBITDA596.60M574.43M526.15M466.58M456.95M416.19M
Net Income235.97M224.11M194.13M183.01M186.84M155.22M
Balance Sheet
Total Assets8.10B8.00B7.60B7.32B6.78B6.39B
Cash, Cash Equivalents and Short-Term Investments56.02M4.28M9.16M8.49M2.82M5.81M
Total Debt3.14B3.10B2.79B2.63B2.56B2.43B
Total Liabilities5.21B5.14B4.82B4.65B4.44B4.31B
Stockholders Equity2.90B2.86B2.79B2.67B2.34B2.08B
Cash Flow
Free Cash Flow-134.16M-142.50M-77.66M-207.90M-214.35M-53.61M
Operating Cash Flow398.46M406.74M489.23M307.24M219.98M352.15M
Investing Cash Flow-542.17M-554.46M-570.81M-516.86M-435.83M-405.80M
Financing Cash Flow203.40M151.55M84.31M213.32M217.52M58.68M

Northwestern Technical Analysis

Technical Analysis Sentiment
Neutral
Last Price52.47
Price Trends
50DMA
54.02
Negative
100DMA
54.37
Negative
200DMA
53.50
Negative
Market Momentum
MACD
-0.55
Negative
RSI
51.23
Neutral
STOCH
90.85
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NWE, the sentiment is Neutral. The current price of 52.47 is above the 20-day moving average (MA) of 51.58, below the 50-day MA of 54.02, and below the 200-day MA of 53.50, indicating a neutral trend. The MACD of -0.55 indicates Negative momentum. The RSI at 51.23 is Neutral, neither overbought nor oversold. The STOCH value of 90.85 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for NWE.

Northwestern Risk Analysis

Northwestern disclosed 24 risk factors in its most recent earnings report. Northwestern reported the most risks in the "Production" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Northwestern Peers Comparison

Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
73
Outperform
$3.34B11.3518.38%2.64%-2.68%-3.73%
AVAVA
72
Outperform
$3.09B16.347.25%5.14%3.14%-2.66%
69
Neutral
$3.29B25.4910.62%2.02%6.03%6.15%
NWNWE
68
Neutral
$3.22B13.658.27%5.08%4.31%19.33%
ALALE
67
Neutral
$3.76B20.356.49%4.51%-11.15%-23.41%
BKBKH
67
Neutral
$4.13B14.538.02%4.79%3.28%-3.49%
64
Neutral
£6.72B7.0415.34%5.83%2.03%-25.14%
* Utilities Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
NWE
Northwestern
52.47
6.05
13.03%
ALE
Allete
64.86
5.20
8.72%
AVA
Avista
38.36
6.42
20.10%
BKH
Black Hills
56.91
5.83
11.41%
MGEE
MGE Energy
90.05
15.78
21.25%
OTTR
Otter Tail
79.69
-4.13
-4.93%

Northwestern Corporate Events

Business Operations and StrategyFinancial Disclosures
NorthWestern Energy Highlights at Mizuho Utilities Conference
Positive
Jun 5, 2025

On June 5, 2025, NorthWestern Energy’s top executives participated in Mizuho’s Mid-Cap Utilities Conference in New York, engaging with analysts and investors to provide insights into the company’s operations and future prospects. The presentation highlighted NorthWestern Energy’s strategic focus on maintaining a strong utility foundation, with ongoing investments aimed at enhancing reliability and capacity to meet future energy demands. The company emphasized its commitment to sustainable growth, with a significant portion of its energy supply being carbon-free, and outlined its financial goals, including a target EPS growth of 4%-6% and maintaining a competitive total return for stakeholders.

The most recent analyst rating on (NWE) stock is a Hold with a $56.00 price target. To see the full list of analyst forecasts on Northwestern stock, see the NWE Stock Forecast page.

Business Operations and StrategyFinancial Disclosures
NorthWestern Energy Highlights at Power and Utilities Conference
Positive
May 28, 2025

On May 28, 2025, NorthWestern Energy’s executives participated in Bank of America’s Power and Utilities Conference in New York, engaging with investors to discuss the company’s strategic direction and financial outlook. The presentation highlighted NorthWestern Energy’s focus on sustainable growth through investments in energy supply and infrastructure, aiming for a 4%-6% annual earnings growth. The company emphasized its commitment to maintaining a strong utility foundation with a carbon-free supply portfolio and its recognition for governance and emergency response efforts.

The most recent analyst rating on (NWE) stock is a Buy with a $62.00 price target. To see the full list of analyst forecasts on Northwestern stock, see the NWE Stock Forecast page.

Business Operations and Strategy
NorthWestern Executives to Attend Financial Forum
Positive
May 19, 2025

On May 19-20, 2025, NorthWestern Energy’s senior executives will participate in the American Gas Association’s Financial Forum in Florida, engaging with investors and presenting company information. The company is focused on long-term growth, with plans for significant capital investment aimed at enhancing earnings and meeting energy capacity needs. NorthWestern Energy’s strategic initiatives include maintaining strong customer satisfaction, investing in energy supply and infrastructure, and leveraging its carbon-free energy portfolio to strengthen its market position.

The most recent analyst rating on (NWE) stock is a Buy with a $62.00 price target. To see the full list of analyst forecasts on Northwestern stock, see the NWE Stock Forecast page.

DividendsBusiness Operations and StrategyFinancial Disclosures
NorthWestern Reports Strong Q1 2025 Financial Results
Positive
Apr 30, 2025

NorthWestern Energy Group reported its first quarter 2025 financial results, showing an increase in net income to $76.9 million, or $1.25 per diluted share, compared to $65.1 million, or $1.06 per diluted share, in the same period of 2024. The company’s earnings were boosted by new rates, higher retail volumes, and increased transmission revenues, despite facing higher expenses and lower tax collections. The company also announced a quarterly dividend of $0.66 per share, payable on June 30, 2025. Additionally, NorthWestern achieved a legislative milestone with the passage of House Bill 490 in Montana, which clarifies wildfire-related liabilities, enhancing the company’s risk management capabilities. The company is affirming its long-term growth rates and capital investment plans, aiming for a 4% to 6% growth rate in EPS and rate base.

Business Operations and StrategyFinancial Disclosures
NorthWestern Energy Discusses Strategic Growth and Investments
Positive
Apr 10, 2025

On April 10, 2025, NorthWestern Energy’s executives hosted a virtual meeting with investors to discuss the company’s financial and operational outlook. The presentation highlighted NorthWestern Energy’s strategic focus on sustainable growth through capital investments and maintaining a strong balance sheet. The company aims for a 4%-6% annual earnings growth, supported by a $2.74 billion capital investment plan over the next five years. NorthWestern Energy’s commitment to sustainability and strong governance practices were also emphasized, with the company recognized for its responsible corporate behavior and customer satisfaction.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Jun 05, 2025